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QINGDAO TODAY
在线翻译:
szdaily -> Markets -> 
Huatai first to launch Shanghai-London link
    2019-06-06  08:53    Shenzhen Daily

HUATAI Securities Co. effectively launched the long-awaited London-Shanghai stock connect Tuesday with the announcement of plans to raise more than US$500 million on the London Stock Exchange (LSE).

Under the connect program, Shanghai-listed companies can raise fresh funds via London’s stock market while British companies can broaden their investor base by selling existing shares in Shanghai.

The launch comes as both China and Britain are entangled in geopolitical uncertainty related to the Sino-U.S. trade war and Brexit respectively.

The program was intended to begin late last year with the December listing of Huatai, backed by Alibaba Group Holding Ltd . However, the planned listing was delayed at the last minute.

Huatai, whose A shares currently trade in Shanghai, said in a Tuesday filing that it would issue 82.5 million Global Depositary Receipts (GDRs), representing 10 percent of Huatai’s total share capital and making it the first firm in China to sell shares under the London-Shanghai program.

“The program offers us access to one of the deepest and most influential capital markets in the world and provides fungibility between the GDRs and the A shares,” said Zhou Yi, chairman and president of Huatai.

In December, people with knowledge of the matter said that the hold-up at Huatai was partially related to a lack of clarity from Chinese regulators over key technical issues.

One of the people said the issues included how China’s government would treat any currency conversion back into yuan, and whether the stock connect program would operate under a currency quota.

Last month, China’s State Administration of Foreign Exchange took steps to resolve such issues when it said it would encourage the use of the yuan in cross-border payments involving depository receipts.

Huatai Securities has a range of businesses, including brokerage, wealth management and investment banking.

The firm, which calls itself technology-empowered, introduced Alibaba and Chinese retail conglomerate Suning.Com Co. last year as strategic investors.

Last year, Reuters reported that HSBC was set to become the first Britain-based company to issue Chinese depository receipts under the London-Shanghai program.

HSBC has tasked its investment banking joint venture in China to work on the issuance, people familiar with the matter said in October. (SD-Agencies)

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